Daily Hindu Editorials

Arun Jaitley’s Budget will be judged by whether it can bridge the gap If the Union Budget is construed as an annual tug-of-war between populism and fiscal prudence, arguably it is the latter that prevailed in the past four budgets tabled by the NDA. However, populism seems to have gained an upper hand in Arun Jaitley’s latest effort. Despite exceptional buoyancy in direct tax revenues (18.7% growth in FY18) and record disinvestment proceeds (₹1 lakh crore), shortfalls in GST mop-ups and dividend receipts have forced the Finance Minister to ease off on fiscal consolidation as mandated by the FRBM Act. The Budget has reported a fiscal deficit of 3.5% (of GDP) for FY18 and pegged it at a high 3.3% for next year. The Economic Survey prepared the ground for a deviation, yet the actual numbers surprised the markets. Armed with a war chest of ₹24.4 lakh crore in budgeted receipts for FY19, Mr. Jaitley has homed in unerringly on the root causes of distress — unrem...

It will ensure consistency, continuity and governance, which are integral to democracy 🔷  YES | Bhupender Yadav Free and fair elections are integral to democracy. Continuity, consistency and governance are also integral to democracy. And democracy, to my mind, also implies good governance. To achieve this, elections are held. But if the means (elections) become the goal, this will not serve democracy well. Holding simultaneous elections will ensure consistency, continuity and governance, and elections then will only be the means to achieve this and not an end in themselves. Implementing simultaneous polls would require a substantial shift from the status quo and would involve amendments to the Constitution and election-related laws. However, does that mean we stop this much-needed reform? Certainly not. 🔹Strengthening democracy Earlier, tax collections were separate for the Centre and the States. We introduced the Goods and Services Tax Council through a c...

There were considerable expectations from the Budget. Given that this is the last full-year Budget by this government and the first one after the revenue uncertainties arising from implementation of the goods and services tax (GST) reform, there were apprehensions about the slippages as well. Indeed, there are electoral budget cycles in every democratic polity and considering the dissatisfaction shown by rural electorate in the recent Gujarat elections, there were definite apprehensions about fiscal laxity. 🔹Focus areas The Finance Minister devoted a considerable part of his speech to elaborate the focus areas in the Budget. These include strengthening the agriculture and rural economy, provision of good healthcare for the poor, taking care of the senior citizens, creation of infrastructure, and working with the States to improve the quality of education. A careful analysis of the allocations to various sectors, however, does not show any significant departures from the p...

The Narendra Modi government has taken pride in having restored the economy to the path of fiscal consolidation. The fiscal deficit target for 2017-18 had been set at 3.2% of GDP for 2017-18 and 3.0% for 2018-19. The Budget for 2018-19 puts paid to these objectives for now. The fiscal deficit for 2017-18 has ended up at 3.5%. For 2018-19, the government has set a target of 3.3%. The fiscal deficit target of 3% of GDP has now been pushed to 2020-21. 🔹Missed targets Revenue receipts in 2017-18 have grown faster than anticipated (although non-tax revenues have fallen short of target). We can compare the revised estimate for 2017-18 with the actual for 2016-17 and the Budget estimate for 2017-18 with the revised estimate for 2016-17. Tax revenues were higher than anticipated (15% compared to 13%). Capital receipts are expected to exceed the budgetary estimate thanks to record disinvestment revenues of ₹100,000 crore (₹27,500 crore higher than targeted). On the revenue...

With a Porto Alegre court upholding Brazilian President Luiz Inácio Lula da Silva’s conviction in a corruption case, his chances of being allowed to contest the presidential elections in October have narrowed. Almost instantly, and perhaps in a sign of defiance, the left-leaning Workers’ Party (PT) announced its decision to field Mr. Lula. The developments echo divisions of the anti-corruption crusades that had engulfed Brazil’s business and political elites and millions of citizens owing allegiance to the architects of the generous welfare and inclusive growth policies of the previous decade. At the root of the ongoing crisis are the so-called Lava Jato, or Operation Car Wash, investigations into alleged kickbacks and political patronage involving the state-owned oil giant. The plea-bargaining provisions in Brazil’s anti-corruption law, which reduce jail terms for defendants in return for testimonies to prosecutors, set off a witch-hunt among the political...